Know Your Bankruptcy Rights as a Consumer

Bankruptcy laws are on the books to give people a fresh start when financial conditions have become too overwhelming. It’s a right provided to you when you are hit with circumstances like loss of employment, illness, divorce, and other financial hardships; it gives you the ability to stop harassing debt collection actions and provides various other means of relief. It’s important to know the rights you have as a consumer under our bankruptcy laws.

Creditors understandably want to protect themselves against the prospect of debts owed to them being discharged. One of the ways creditors sometimes try to do this is through adding a “bankruptcy waiver” clause to contracts and agreements. Understandable or not, these waivers are not binding. Any waiver of your future bankruptcy rights is not enforceable. Congress has expressly stated in the bankruptcy codes that a bankruptcy debt discharge halts any action against the debtor “whether or not discharge of such debt is waived.” 11 U.S.C. § 524(a)

Once your debts have been discharged, your creditors are prohibited from any collection action per the federal discharge order.  You do not have to tolerate any bullying or undue collection actions from creditors.   If a creditor attempts collection on a discharged debt they can be brought in front of the bankruptcy judge on a Motion for Contempt.

Even prior to filing bankruptcy creditors do not have the right to harass you with excessive telephone calls and letters, or unwanted visits to your residence. The Federal Trade Commission has established rules under the Fair Debt Collection Practices Act that creditors must follow. Creditors cannot:

  • Demand you pay more than you actually owe
  • Add additional fees to the agreement
  • Call excessively, call during unreasonable hours, or call you at your workplace if you have requested that they desist
  • Use threatening or obscene language
  • Contact your employer regarding your debt

If you are being illegally harassed by creditors, you do have recourse. To learn more about your bankruptcy rights, and how they can be enforced against creditors, set up a consultation with a bankruptcy attorney.


Chapter 7 Bankruptcy and Social Security Benefits

Before we get into the matter of Social Security benefits, we should provide some context about Chapter 7 bankruptcy and the intricacies that go along with it. This is a liquidation form of bankruptcy, and depending on the circumstances, it can eliminate some or all of the debts that are making like difficult for you.


To qualify for this form of bankruptcy, you must be able to pass the means test that is in place to determine whether you have enough disposable income to make an effort to pay back your debts over time. A formula is used to make this determination if your income is more than the median income in your state. Getting back to Social Security benefits, your monthly direct deposit would not be counted when this means test is being conducted.


As we mentioned previously, this is a liquidation bankruptcy, and this means that property that is not exempt or secured would be turned over to a bankruptcy trustee. Under state laws, the trustee would liquidate the property and use the proceeds to pay back creditors. The good news is that many different types of property are exempt, including your Social Security benefits. For your information, here are some of the other types of property that are exempt when you are filing for a Chapter 7 bankruptcy:


  • Alimony
  • $47,000 of Home Equity for joint filers
  • $3775 of Motor Vehicle Equity
  • Retirement Accounts and Pensions
  • Veterans Benefits
  • Some Personal Property


You are going to be required to submit a great deal of paperwork when you file for Chapter 7, including a detailed accounting of your assets. While it is true that your Social Security benefits are exempt, you have to be sure that it is clear that benefits that may have accumulated in a bank account are in fact coming from Social Security. If you co-mingle your funds in one account, it can be hard to prove that a portion of the account should be exempt because it came from your Social Security benefits.


Contact OlsenDaines Today!


If you have questions about bankruptcy, we can provide answers, and we can guide you toward the optimal course of action given your unique set of circumstances. We offer free bankruptcy consultations to people in Tigard, Salem, Klamath Falls, Roseburg, and numerous other communities throughout the state of Oregon. If you would like to set up an appointment, simply send us a brief message through our contact page and we will get back in touch with you soon as we can.


How Do You Rebuild Your Credit After Bankruptcy?

Your credit score is extremely important in many different ways. Everyone likes to have spending power, and you are definitely going to be limited if you have credit woes. The lack of financial freedom can be disheartening, but the damage can cut much deeper. Renting an apartment can be difficult if you have a very poor credit score, and you may even be precluded from consideration for certain jobs if your credit is not up to par.


It can seem like a bankruptcy filing is just going to make a bad situation worse if your credit is taking hit after hit, but this is not necessarily the case. While it is true that a Chapter 7 bankruptcy will remain on your credit report for 10 years, you can start to rebuild your credit right away if you are a homeowner. If you file for a Chapter 7 bankruptcy, and you have a mortgage on a home with limited equity, you can maintain ownership of the property (if you are up to date on the payments). The same thing is true for your car. If you continue to make these payments in a timely manner, your responsible behavior will have a positive impact on your credit going forward.


Many people are surprised to find out that they can in fact get credit cards with low limits after they file for bankruptcy. In addition to the low limits, there may also be rather high annual fees, and interest rates will be high. If credit card usage got you into trouble in the first place, you may be reluctant to try to obtain lines of credit after you have successfully filed for bankruptcy.


This makes sense on the one hand, but on the other hand, if you can get credit extended to you, and you act wisely, your score will improve over time. In addition to credit cards, if you don’t own a home, after a couple of years you may actually be able to qualify for a mortgage. A motor vehicle loan may also be available to you after bankruptcy, but you should be prepared to pay a high interest rate, and a significant down payment may be required.


Schedule a Free, No Obligation Case Evaluation


If you are in Portland, Salem, Eugene, Medford or any other city of significant size in Oregon, we have a bankruptcy law office near you. We offer free initial consultations, and you can set up an appointment right now if you call us toll-free at 1-800-682-9568.



Who Can Qualify for a Chapter 12 Bankruptcy?

It can be a bit confusing for the layperson to sort through all the different types of bankruptcies that you may hear about. There is Chapter 7, Chapter 11, Chapter 12, and Chapter 13, and you are naturally going to wonder how you should choose from this menu. This is understandable, but when you absorb the facts, you will invariably see your options shrink.


First off, a Chapter 11 bankruptcy is typically utilized by businesses, though individuals with very high levels of debt sometimes utilize this type of bankruptcy.


A Chapter 7 bankruptcy is a liquidation bankruptcy that is often used by individual debtors. To qualify for this type of bankruptcy, you have to be able to pass a means test. The basic rule of thumb is that you pass the test if your income is less than the median income in your state. However, under some circumstances, it is possible to qualify even if your income exceeds the median.


If you do not qualify for Chapter 7, or if you choose to go a different route for other reasons, you could opt for a Chapter 13 bankruptcy. This is a reorganization, so you submit a repayment plan to the court that spans for three years or five years. You may not have enough disposable income to make payments toward all of your responsibilities, so there is a pecking order of sorts that has been established to prioritize debts for repayment purposes.


Family Farms and Fishing Businesses


Now that we have looked at the other forms of bankruptcy, we can dig into Chapter 12. We practice law in the states of Oregon and Washington, with offices in Portland, Eugene, Vancouver, and quite a few other cities. In our part of the country there are many family farms, and there are family fishing businesses in coastal communities. Chapter 12 bankruptcy is specifically designed for family farmers and fishing businesses that derive more than half of their gross income from these enterprises. For a farmer to qualify, at least half of the total debt must be attributable to the business operations. This figure is 80 percent for commercial fishing businesses.


If you would like to discuss a Chapter 12 bankruptcy filing or any other debt relief strategy with a licensed bankruptcy attorney, we would be more than glad to assist you. We offer free case evaluations, and you can give us a call at 1-800-682-9568 to schedule an appointment.



Can an LLC File for Chapter 7?

Many individual debtors file for Chapter 7 bankruptcy because they will obtain some financial breathing room through the discharge of their unsecured debts. For example, credit card debt can spiral upward over time, and it can reach the point where you simply can’t pay all of your credit card bills and the other debts that you have. If you successfully file for a Chapter 7 bankruptcy, the credit card debts could be discharged, and you will find it easier to keep your other obligations current. Credit card debts are just one type of unsecured debt that can be discharged through a Chapter 7 bankruptcy filing. Others would include medical bills, unpaid lease obligations, past due utility bills, personal loans, and payday loans.

A Chapter 7 bankruptcy can also be filed by a limited liability company. However, things work a little bit differently when it comes to the details. A Chapter 7 bankruptcy is a liquidation bankruptcy, so nonexempt property must be turned over to a bankruptcy trustee. It is liquidated, and the proceeds are used to pay the debts. When an individual files for this type of bankruptcy, many forms of property are exempt, including up to $40,000 of home equity (in the state of Oregon, or $50,000 for a married couple), $3000 of equity in a motor vehicle.

There are no such exemptions when you file a business bankruptcy, and there is no discharges. The purpose of a business Chapter 7 filing is to permanently shut the doors and liquidate the assets to pay as much of the outstanding debt as possible. The bankruptcy trustee handles the liquidation tasks, so the business owner does not have to interact directly with the creditors. You have to understand the fact that an individual owner of an LLC will still be liable for any business debt that was personally guaranteed if the proceeds from the liquidation were insufficient to pay these debts in full. Under these circumstances, you will want to consider a Chapter 7 as an individual.

If you would like to discuss a business or personal bankruptcy with a licensed attorney, we would be happy to accommodate you. Our firm offers free, no obligation consultations, and you can request an appointment if you send us a quick message through this page: Portland, OR bankruptcy attorney.

Avoid Post-Bankruptcy Mistakes

If you are being overwhelmed by ever-spiraling debt, bankruptcy can provide a solution, and the benefits are realized immediately. You get an automatic stay when you file for bankruptcy, and this makes most debt collection efforts come to a halt. The two different types of bankruptcies that most people (who are not in business) use are Chapter 7 and Chapter 13. Under a Chapter 7, unsecured debts like credit card balances and medical bills can be completely discharged. Plus, if you are current on your payments and you don’t have more than $40,000 in equity, you can maintain ownership of your home. The same thing is true for your car with an equity limit of $3000.

With a Chapter 13 bankruptcy, your debts are reorganized, and you make monthly payments over a three-year or five-year period. The court determines how much of your income is “disposable,” and these funds are utilized to make the payments. There are priority debts, and non-priority unsecured debts. If there’s not enough money to make payments on all of the debts, all or some of your unsecured debts may be discharged under Chapter 13.

Before you can get a discharge with either type of bankruptcy, you have to complete an accredited debtor education course. You can see a list of the approved providers if you visit the United States Department of Justice website. The information that you will receive should help you make good choices going forward so that you can avoid post-bankruptcy mistakes and steer clear of future financial problems.

Everyone makes errors, but the key is to learn from them. If you had to file for bankruptcy because you made poor financial decisions, you should certainly go forward with a new perspective once you are given a fresh start. You may be surprised to find out that you can obtain credit cards, a car loan, and even a mortgage after you file for bankruptcy if you act wisely and consistently meet all of your financial responsibilities.

Take Control of Your Financial Future!

A bankruptcy filing can ease the pressure in the present and help you regain control of your financial future. If you are in Portland, Eugene, or Medford, Oregon, we have a bankruptcy law office nearby, and we would be more than glad to provide you with a free consultation. To set up an appointment, call our office toll-free at 800-682-9568.

Can You Get a Mortgage After Bankruptcy?

Many people are under the assumption that you are essentially ruined after you file for bankruptcy for at least 7 to 10 years. In fact, this is a misconception. It is true that a Chapter 7 bankruptcy will remain on your credit report for 10 years, and a Chapter 13 will stay on the report for seven years. However, the existence of a bankruptcy on your credit report will not necessarily preclude you from obtaining credit, and this will include a home mortgage.

The exact period of time that you have to wait to be able to obtain a mortgage after bankruptcy depends on the type of loan. FHA loans are very popular because they are guaranteed by the government and the minimum down payment is small. You will typically have to wait three years after a Chapter 7 discharge to obtain this type of mortgage. With a Chapter 13, after you have kept your repayment plan current for 12 months, you could potentially qualify for an FHA home loan.

Many veterans can qualify for a VA mortgage. This type of home loan is similar to the FHA loan with regard to the government guarantee that eliminates the need for mortgage insurance, and qualified veterans can get a VA mortgage with nothing down. The minimum waiting period for eligibility after bankruptcy is two years.

For conventional loans, you can become eligible three years after the discharge in a Chapter 7. Many people can qualify for a conventional mortgage shortly after a Chapter 13 has been successfully completed.

Since the requirements for mortgage qualification changes frequently, you should contact an experienced mortgage broker to discuss recent changes to the timelines noted above.

We Are Here to Help!

If you are in Portland, Eugene, Coos Bay, Medford, or any other city in the state of Oregon we have a bankruptcy law office near you and we provide free initial case evaluations. To schedule an appointment send us a quick message through our contact page and we will be back in touch with you shortly.

Is Credit Card Debt Settlement Possible?

There are many different underlying reasons why people sometimes fall into unmanageable credit card debt: overspending, loss of income, unforeseen expenses. Before long, a person has exceeded their credit limit and the minimum payment is no longer just a drop in the bucket. Getting additional credit cards compounds the problem. In fairness, the credit card companies certainly set enticing traps on an ongoing basis as they continually dangle new credit offers.

Excessive credit card usage is certainly the root cause of some financial calamities, but many people fall into debt that they cannot handle through no fault of their own. Medical conditions that result in costly health care bills can lead to overwhelming credit card debt, and a period of unemployment can be another underlying cause.

If you do find yourself with credit card debt that you cannot pay, some credit card companies will work with you to one extent or another. The possible courses of action depend on the policies of the company, the amount of the debt, and the repayment time frame. If you are going to be late for the first time, but you will be able to make a payment a week or two after the due date, the company may be willing to change the payment date. When you are negotiating with your credit card settlement, you may ask them if they will be willing to reduce the interest rate or accept a lump-sum settlement of the debt.

Bankruptcy is also an option, and it can be a more attractive one when certain circumstances exist. With a Chapter 7 bankruptcy, your credit card debt can be completely discharged which can be a huge relief. If you would like to discuss the possibilities with our firm, we will be more than glad to assist you. We can discuss with you the pros and cons of settlement verses bankruptcy. We offer free, no obligation case evaluations to people in Portland, Eugene, Medford, and residents of most other metropolitan areas in the state of Oregon. To set up an appointment, send us a message through our case evaluation request page.

Are There Different Types of Bankruptcy?

If you sit down and discuss your options with an attorney, you may be surprised to hear that there are multiple different types of bankruptcies. An individual will probably be best served by a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

With a Chapter 7 bankruptcy, an automatic stay is imposed, so all collection efforts will immediately come to a halt. You can maintain possession of your car and your home if you are up to date on your payments and you don’t have a lot of equity. Property that is not exempt must be turned over to a trustee so it can be liquidated. The proceeds will be used to pay the delinquent debts. However, most people who file for this type of bankruptcy have little or no non-exempt property to surrender.

Unsecured debt will be discharged, so you will no longer have to be concerned about collection calls from credit card companies or collection agencies. A Chapter 7 bankruptcy will stay on your credit report for 10 years; that’s the bad news. The good news is that you still may be able to obtain debt after you file if you need to, but you will typically be required to pay higher rates of interest.

Chapter 13 is a reorganization bankruptcy. If you have enough disposable income to make payments on your debts, you will not qualify for Chapter 7, but you can still file for Chapter 13. Under this form of bankruptcy, you will get the same automatic stay. You will be able to maintain possession of your property if you can keep your payments current, and a three to five-year debt repayment plan will be submitted to the court. This plan can include past due mortgage or car payments, so a Chapter 13 can help you avoid a foreclosure or repossession if you have fallen behind. A Chapter 7 does not allow for a repayment plan to correct mortgage arrearage over a period of years.

A Chapter 11 bankruptcy is a reorganization bankruptcy that is used by business entities, but some individuals with very high levels of debt may qualify for this type of bankruptcy. Chapter 12 is a special form of reorganization that is available to some family fishing businesses and family farmers.

We have provided a brief overview in this blog post, but we will be more than glad to answer all of your questions in detail. Our firm offers free consultations to clients in Portland, Medford, Grants Pass, Roseburg, and a number of other cities in Oregon and Washington. If you will like to set up an appointment, fill out the request form on this website and we will contact you ASAP.

Can I Negotiate a Debt Repayment Plan?

When you become incapable of keeping up with all of your creditors’ demands, you are naturally going to consider the possibility of a bankruptcy filing. In many cases, this is the best course of action, but you should understand all of your options so that you make the right decision.

There is a popular misconception that some people have with regard to bankruptcy. They assume that there is no debt repayment plan, because you are essentially waving the white flag as you file for a fresh start. In reality, the matter of repayment will depend upon the type of bankruptcy that is filed. If you can qualify for Chapter 7 bankruptcy, your unsecured debts will usually be discharged.

Chapter 13 Reorganization

A Chapter 13 bankruptcy is a court-ordered repayment plan. You do not have to surrender your property when you file for this type of bankruptcy. Your debt is reorganized, and your disposable income is utilized to pay the debt over a period of 3 to 5 years. You have to pay all of your priority debts, like taxes and child support, under the reorganization plan. Secured debt like your mortgage and car payments will also be prioritized if you decide to keep those items. Depending on the extent of your disposable income and the level of debt that you have, you may be able to pay a reduced amount to satisfy unsecured debts like credit card and medical bills.

Negotiating With Creditors

It is possible to negotiate with some creditors as an alternative to bankruptcy. Your mortgage lender may work with you if you can stay current going forward and make additional monthly payments to correct the arrears. Credit card companies may be willing to make arrangements with you, but some of them are more responsive than others. We have offices in a number of cities throughout the state of Oregon, including Medford, Salem, and Portland. Utility companies in Oregon typically offer deferred debt repayment plans and payment assistance if you are experiencing a hardship.

We are here to help if you will like to set up a case evaluation, and we offer these sessions free of charge. At the consultation we can get to know you, answer your questions, and help you take the appropriate actions if you decide to proceed. To set the wheels in motion, give us a call right now at 1-800-682-9568.